Fidelity Investments Review: Best Broker for Long-Term Investors?

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Thinking of opening a brokerage account with Fidelity? There are many reasons to love Fidelity and a few reasons to think about going elsewhere.

Overall Score

4.4

Stock Trading

4.0

Options Trading

4.0

Mutual Fund Trading

4.5

Banking

5.0

Mobile App

4.0

Commissions and Fees

4.0

Research

5.0

5-point scale (the higher, the better)

Pros and Cons

Research reports

Beginner-friendly tools

Mobile app

Restricted platform

Bottom Line

Comprehensive online broker with in-depth research

With Fidelity, you'll certainly almost never lack for research or reports to read. This is great whether you're just starting out or you're a savvy investor who needs to stay on top of the latest trends.

But this can also be a bit overwhelming or intimidating for beginners. To help those new in the game, Fidelity provides many courses and webinars designed to get even the most novice investors up to speed on investing basics.

Benefits: Why We Like It

Research: Fidelity provides some of the most in-depth research out of all the brokerages. A single quote can present upwards of a dozen third-party reports for you to peruse. Beware of information overload, though - with that many reports, it may become difficult to pick out the ones that offer the soundest advice.

Beginner tools: New to investing? The Fidelity platform offers articles, videos, infographics, webinars and courses to help you get up to speed. The site will even help you track your progress to make sure you've covered all the key elements. Best of all, content on the platform is sorted by experience level, category, and content type for easy searching.

Breadth of services: Fidelity offers a wide range of investment products, from stocks to mutual funds to ETFs to options to bonds & CDs. It also offers IRA accounts, 529 College Savings, and cash management accounts. It's basically a one-stop shop for all your financial services.

Mutual funds: Fidelity is our favorite brokerage for mutual funds. It offers over 11,000 mutual funds for buy sell, including over 3,500 that have no transaction fees. Fidelity also provides comprehensive tools and educational resources on making mutual fund investments.

Fees: Fidelity charges a flat fee of $4.95 per stock trade. For other services like broker-assisted trades and mutual fund trades, Fidelity charges more than some competitors.

Mobile app: Fidelity's mobile app has gotten very positive reviews for its user friendliness and the range of activities that can be performed within it. The app is available for all major operating systems, is highly customizable, and integrates easily with banking services. You can pay your bills from it and deposit checks through your smartphone.

Drawbacks: Why You Might Want to Look Elsewhere

Restricted Trading Platform Access: Most of Fidelity's trading platforms require users to meet some sort of trade threshold before they're granted access. The lowest of these is 36 trades per 12 months (which needs to be maintained on a rolling basis), but more advanced tools require 120 per 12 months.

For buy and hold investors - which probably describes the vast majority of people who are growing their money slowly over time - it's unlikely that they'll reach those thresholds, and therefore will be unable to access these tools.

Tip: Ameritrade wins our title of Best Platform. And the best part is that there is absolutely no trade or account threshold you have to meet to access their gold standard thinkorswim platform.

No community forums: Especially for investment beginners, online community forums can be a great source of support. While some of Fidelity's competitors have thriving online communities, this feature is missing entirely from its platform.

Who It's Best For

The Fidelity platform is a good fit for investors at either end of the trading activity spectrum. The prices are reasonable for long-term investors who want to buy and hold a couple of mutual funds or stocks. They'll also like the ability to access, monitor, and track investments once they are made.

At the other end of the spectrum, the most active of traders will find the extensive database of research reports useful. And they're also more likely to unlock access to the platform's most advanced trading tools.

However, those in the middle - semi-active investors who plan to make a trade or two a month - may want to consider another platform. You may be better off with a broker that will give you access to a wider range of tools without such a high activity threshold.

Commissions and Fees

Fidelity's fee structure is as follows:

Stock Trade Fee (flat): $4.95

Options Base Fee: $4.95 +

Options Contract Fee: $0.65

Broker Assisted Trades Fee: $32.95

Mutual Fund Trade Fee: $49.95

You can also access over 3,500 no-transaction-fee mutual funds and over 91 ETFs commission-free on the Fidelity platform. This is one of the best selections of no-fee funds available from any online brokerage.

Customer Service

If you find yourself in need of assistance, Fidelity's customer service is available via phone, email, or live chat. The company has a strong reputation for being responsive to customer requests and for giving quick turnarounds.

Research Tools

The research side of the Fidelity platform is one of its strongest - pulling a single quote will get you a dozen or more third-party research reports to look through to help you decide whether the security you're researching is a good fit for you. The primary provider of Fidelity's research and data for stocks and ETFs is Morningstar, a leader in the finance industry.

Trading Platform

Fidelity has thankfully revamped its website in recent years (the previous clunker was difficult to navigate). The results have been largely positive, with improved menus for navigation and an easy-to-access dashboard.

There are several different tools included on the training platform, but unfortunately, you need to be a fairly active trader to access most of them. Active Trader Pro is the company's main trading platform, but only users who make 36 or more trades in a rolling 12-month period can access it. Two other tools - Recognia anticipated events and Elliott Wave analysis - require 120 or more trades within that same window to unlock.

Fidelity provides a desktop-based platform for PCs (Active Trader Pro®) and web-based platform for either PC or Mac (ActiveTraderPro.com®). Among the many features include:

Conditional orders to create triggers for stock and option orders based on price movements

Real-time integrated balances, history, and positions

Tip: And if you're a very active trader, you can get access to the best of the best of the platforms offered by Fidelity, a service known as Active Trader Services. This is reserved only for traders who make 120+ trades in a rolling 12-month window and have at least $25,000 invested across all their Fidelity accounts.

Mobile App

The Fidelity mobile app, available for iPhone, iPad, Android, and Windows, is very user friendly. It's easy to integrate banking services with the app, and users are able to create "home screen cards" that give an overview of all accounts at login.

Alternatives

Vanguard: Not a site for beginning investors, Vanguard's old-school site is difficult to navigate and contains more than enough information to overwhelm users. Also complicated is its fee structure, which is tiered - the more trades you make, the more you pay for each of them. The one major perk of Vanguard is that you won't pay any fee at all to invest in Vanguard ETFs.

ETrade: Much like Fidelity, E-Trade has a good deal of content for beginner investors and great research tools. And also much like Fidelity, ETrade has a higher tier trading platform that's reserved for only the most active of investors. But E-Trade's minimum deposit of just $500 may be easier to swallow, compare to Fidelity's minimum deposit of $2,500.

Benefits and Features

$6.95 + $0.75 per contract
$4.95 + $0.50 per contract if you make 30+ trades a quarter

Mutual Fund Trading

$0 transaction fee for Fidelity funds
$0 on purchase for NTF (no transaction fee) non-Fidelity funds. ($49.95 on redemption if held less than 60 days)$49.95 on purchase for non-Fidelity funds; $0 on redemption. (Certain funds may have a $75 transaction fee).

Active Trader Pro (requires you trade 36 times or more in a rolling 12 month period)

E*TRADE Pro (requires you execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000)

Futures Trading

Locations

More than 180

30

Online Community

ETrade Community lets you exchange trading and investing ideas with other ETrade customers.

Seminars

Live events and educational seminars at local branches.

Virtual Trading

Stock Trading

Options Trading

Mutual Fund Trading

Banking

Mobile App

Commissions and Fees

Research

Ease of Use

Online Community

Trading Platform

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

Fidelity: Pricing information from published website as of 02/28/2017

E*TRADE: Pricing information from published website as of 03/13/2017

TD Ameritrade: TD Ameritrade charges more than Fidelity, so why would you consider Ameritrade? For starters, TD Ameritrade has no minimum deposit requirement, Forex trading, and the legendary thinkorswim platform (often considered one of the best in the industry). The biggest plus is that there is no minimum trade or account value thresholds to assess the thinkorswim platform.

Benefits and Features

$0 transaction fee for Fidelity funds
$0 on purchase for NTF (no transaction fee) non-Fidelity funds. ($49.95 on redemption if held less than 60 days)$49.95 on purchase for non-Fidelity funds; $0 on redemption. (Certain funds may have a $75 transaction fee).

Active Trader Pro (requires you trade 36 times or more in a rolling 12 month period)

thinkorswim

Forex Trading

Futures Trading

$2.25 per contract (plus exchange & regulatory fees)

Locations

More than 180

More than 100 locations in 34 states

Seminars

Online webcast

Virtual Trading

Paper Trading to practice/test strategies and ideas.

Stock Trading

Options Trading

Mutual Fund Trading

Banking

Mobile App

Commissions and Fees

Research

Ease of Use

Online Community

Trading Platform

Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details.

Fidelity: Pricing information from published website as of 02/28/2017

TD Ameritrade: Pricing information from published website as of 03/13/2017

Bottom Line

So is Fidelity right for you? In our opinion, Fidelity is a great comprehensive online broker with in-depth research for long-term investors. It also serves a great one-stop-shop for all your financial services. Both new investors and active traders will find Fidelity easy to use.

The major downside, though, is that you are required to make a certain amount of trades in order to unlock the more advanced trading tools. So if you're a moderately active trader, you may want to go with another broker that doesn't have this kind of trade threshold requirement.

Leah Norris is a research analyst at CreditDonkey, a stock broker comparison and financial education website. Write to Leah Norris at leah@creditdonkey.com. Our data-driven analysis has been recognized by major news outlets across the country and has helped investors make savvy financial and lifestyle decisions. (read more)

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

Finding the right online broker is a difficult task. Dozens of sites claim to offer the best solution for your investing needs, whatever they may be. These sites tempt you with the promise of having the lowest fees, the most intuitive interface, and more investment choices than the competition.

When looking for the best online broker, it's easy to become frustrated. If you rely on TV advertising to find a great one, you're going to get hit with bad fortune tellers, chimpanzees riding horses, and talking babies. It's tough to put your trust in those kinds of things, especially when your financial future is on the line.

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